Friday, December 31, 2010

Better Listen To Your Customers

In a recent Edelman Strategy One poll, 82 percent of Americans gave the country’s businesses a grade of “C” or LOWER and 61 percent said American corporations failed to meet their expectations in 2010.

In fact, the Edelman survey concluded that 40 percent of people answering the poll gave American businesses a letter grade of “D” or “F.” Only 17 percent awarded an “A” or a “B.”

More than 80 percent said they won’t change their mind about American businesses until they begin promoting ethical behavior, make products with fewer recalls and fewer mistakes, among other things.

You don’t have to rely on the Edelman poll to know how unhappy Americans are with their government and the corporate world. Talk to anyone, anywhere and it won’t take long before you hear horror stories about how some company or some bureaucrat ignored them, mistreated them, misled them, took advantage of them or otherwise failed to meet their obligations.

What does this have to do with crisis management?

A lot.

Two-thirds of all business crises are preventable. Many of them start out with small issues that someone should recognize and fix. So all the things consumers complain about are the very things that can snowball and cause a company a significant loss and/or damage to its reputation.

The other side of this coin is the lack of bankable GOODWILL.

When companies have a crisis and their employees or partners or customers or shareholders, or all of the above turn on them, a good supply of banked goodwill will go a long way toward helping them get through the problem and speed recovery.

You cannot bank any goodwill when your publics think you are unethical or they can’t depend on your service or products.

Tuesday, December 28, 2010

Two Certainties for the New Year!

Do you run a small business? An international conglomerate?
A not-for-profit? A Hospital? A manufacturing plant?

Whatever you do, there are two certainties you are facing in the New Year. You will depend more than ever on computers and social media, AND you face a greater than ever chance that someone will “hack” into your business or organization and do major damage to your reputation and your bottom line.

Bob Sullivan writes the Red Tape Chronicles for MSNBC.Com ( and he has identified ten things “web users should fear” in the New Year.

I recommend you read his warnings. But let me just touch on a few of his concerns with examples from our own clients.

So many young business people are bringing their social media practices to their work world and sometimes sharing way too much about their work and personal lives with their so-called friends on sites like Facebook and Foursquare. Sullivan warns that hackers will turn stalkers and use these sites to take advantage of you.

We work with a very talented and brilliant consultant who spent a number of years working his way up the corporate ladder of one of America’s best companies. He married late and had his first baby recently. He started his own consulting business and bought in to the “networking” idea. His new business “took off” and so did he. He was flying here and there weekly. In the early days, he posted on more than one social networking site that he was off to New York to meet a new client and how long he was going to be gone.

After watching this for a few weeks, I took a deep breath and called him and offered a “father’s perspective” as well as that of a frequent flier, too. I asked him if he was not at all concerned about announcing to the world when he was going to be gone and his wife and new baby were going to be home alone?

He scaled back his “sharing.”

Sullivan confirmed a great concern I have about “cloud computing.” If hackers and industrial spies and WikiLeaks can get in to government websites, major banking sites, and even disrupt a nuclear power plant – all facilities with what you would think was rock solid computer security – how easy will it be for your digital files to be compromised when you start keeping them and working on them on leased computer space on someone else’s servers?

And Sullivan raised another issue. What if your most sensitive documents are stored on someone else’s “cloud” and they raise the monthly rent, or you get behind in making your monthly lease payment, and all of a sudden they cut off your access to your own data? Ouch!

And off course, with the addition of all kinds of computer type programs on your mobile phones and devices in your homes, such as TV’s and even kitchen appliances, there will be “bad guys” looking for ways to compromise all those devices and take advantage of you.

I’m not suggesting we stop technological advances. I am suggesting we all use common sense and be very careful.

Horse thieves quit stealing horses after cars were invented and began stealing cars. Robbers gave up stopping stage coaches and began robbing trains. With each technological advancement there are people looking for ways to take advantage.

The best way to protect your digital data and important documents and sensitive communication is to not put them where anyone can get to them … or don’t write them down at all. So what if you have to pick up the phone or walk to the next cubicle to tell someone something sensitive. Sure it would be so much easier to send an e-mail or a Tweet.

Just remember, when you write something down, always assume that someone other than the intended recipient will see it, sooner than later.

Tuesday, December 21, 2010

Happy Holidays And Don’t Forget to Hang Up The Phone

The fourth largest pharmaceutical company in the world laid off more than 1,000 employees BY CONFERENCE CALL a few days after Thanksgiving.

I’ve been covering lay-offs and downsizing for 35-years and helping companies plan and execute big and small lay-offs for nearly 20-years. I have NEVER heard of a lay-off by conference call.

It’s bad enough that companies, encouraged by their accountants and CFOs, feel compelled to fire people just before Christmas. That’s insane in my opinion. But to do it on the telephone!?!?

Sanofi-Aventis, maker of Plavix, Ambien and Allegra, among other products, showed no sign of concern for its remaining employees, let alone the employees they didn’t need any more. They laid off 750 employees Thanksgiving 2009, more around Thanksgiving 2008, more last Christmas and a number of employees were shown the door July 4th weekend a year ago.

The CEO of Sanofi Aventis, Gregory Irace, issued a cold, hard statement this November, “Given the serious challenges facing our organization and the healthcare industry, it is important to act decisively now so that our organization has greater stability moving forward and that our resources are allocated to our strategic growth priorities.” Obviously, Mr. Irace’s priorities do not include his employees, even the ones who were notified by conference call, also, that their jobs were safe for the time being.

When we work with clients to plan and prepare for a significant lay-off, we always plead with them to have grief counselors available, both for those getting laid-off, but even more importantly, for those who will keep their jobs, while their friends and co-workers are on their way out.

There is a terrible feeling of guilt for those who remain. They feel bad that they still have a job while their co-workers don’t. Then anger strikes. The remaining employees are faced with having to work harder to make up for the workers that are no longer there to help. Guilt and anger are two very powerful forces working to undermine productivity. And a decline in productivity means an increase in costs and a decrease in profits.

A company spokesperson argued there was no other way to “quickly and consistently” notify hundreds of American employees that their jobs were being eliminated. Shel Holtz’s podcast on the “conference call lay-offs” put it simply, “The truth is they were too lazy to come up with another way,” he said.

Lazy is probably more forgivable than the cold-heartedness that drove the decision.

There are a number of cost-effective and coordinated lay-off scenarios. All of them allow a company to treat its employees with dignity and compassion. They require a little planning and preparation, but that pays off in the long-run.

What happens if business rebounds and you need to hire some of those workers back? What if business improves and your remaining employees find places to work where they will be treated better and bail on you?

This makes Scrooge seem like a nice old man.

Thursday, December 16, 2010

Are You Ready for the Two Cs?

Are you ready for Christmas? Are you ready for a crisis?

In my experience, the two tend to occur in very close proximity to each other.

Some of the most tragic business crises the Institute for Crisis Management has been called to help with, involved the Christmas/New Year holiday.

One of the most tragic was a workplace violence incident the day after Christmas in the main offices of a wonderful company in suburban Boston. If you were ever going to convince yourself that “nothing bad is ever going to happen to my company” this one would have been it.

On Christmas day, a troubled and unhappy employee brought an AK-47, shotgun and semi-automatic pistol and gym bag full of ammunition into his office and hid them under his desk.

The next day he went hunting in the building and killed seven co-workers.

The leadership of the company was outstanding. They cared about their employees and provided a challenging, but pleasant work environment.

The unexpected violence and trauma touched everyone from the CEO to the newest hire.

The company did not have a crisis plan, but had a leadership team that knew what it needed and reached out for help. ICM was one of the companies that responded to the call. And the top managers did almost everything right.

They treated their employees with care and support, the victim families with respect and tenderness, their vendors with concern and their clients with openness.

When the dust settled and management began to restore operations, everyone was ready and willing to support the leadership and the company came back stronger than ever.

I hope you have a crisis operations, communication and recovery plan. And, I hope you have our number handy: 888-708-8351.

Merry Christmas and a Happy New Year!

Friday, December 3, 2010

Fire In Israel Is Lesson To Business Everywhere

The horrific forest fire that leveled more than 12,000 acres and several villages near Haifa in Israel, killing at least 41 people, should be a lesson to business owners/managers/executives and the leaders of every other kind of organization, everywhere, that they need a crisis plan!

You do not have to have a crisis of your own, to have a crisis.

What may have started as a “trash fire” forced the evacuation of a university, three prisons and a hospital. A bus-load of prison guard cadets died when the bus taking them to fight the fast spreading fire overtook the vehicle and consumed it quickly.

Several local businesses were leveled and life was disrupted for thousands in and around Israel’s third largest city, Haifa.

When we help a client prepare a crisis plan, we always recommend a section for “someone else’s crisis.”

We’ve had manufacturing facilities shut down because a neighboring plant had a spill and the local fire department ordered an evacuation of all surrounding facilities. It doesn’t have to be a crisis of your own, with the reputational damage that goes with it. It can be a significant disruption of your operations because of someone else’s problem.

You will still have to have an evacuation plan, an internal as well as external communication strategy, and continuity and recovery plan.

We have worked with a major pharmaceutical company. If they have a power outage or otherwise some disruption to their manufacturing process, they may have to shut down everything. That means a major loss of a valuable batch of product, which leads to a major clean-up and sterilization of the production line -- all-in-all, an unplanned loss of as much as hundreds of thousands of dollars.

If you manage a small business, a medical practice, a hospital or school, or any kind of organization, you should have three crisis plans:

1. An operational crisis plan – what do you do when someone pulls the fire alarm, a tornado takes the roof off, flooding overcomes your facility, someone with a gun storms into the building, or any number of other “sudden crises” strike?

2. A communication plan – who do you need to communicate with, who is going to speak for your organization, what are they going to say, how are they going to deliver the message, who has the final say on what is said?

3. A continuity and recovery plan – how do you get through the immediate disruption and how do you get back to normal operations?

In the best of all worlds, those three plans should be integrated into one comprehensive plan.

And, be sure and anticipate someone else’s crisis causing a major headache for you.